Organizational Change
Starbucks UK to Give 'Home Sweet Loans' to Employees Under 25, Living Wage to All

Starbucks UK has announced it is going beyond government recommendations for the National Living Wage and will be the first private company to implement housing and homelessness charity Shelter’s Tenancy Deposit Loan Scheme, to help its employees manage the cost of living.

“There are now 11 million private renters in England, and as housing costs keep rising, more and more people are struggling to scrape together the deposit needed to rent a home," said Shelter chief executive Campbell Robb.

Starbucks will extend its basic pay to £7.20 per hour in April 2016 all employees, including apprentices, and pay a London Premium for those working in the capital. This extension will apply regardless of age, effecting more than 4,500 members of staff who are under the age of 25. The current base pay for Baristas is £6.77 per hour. Supervisor pay will move from £8.20 to £8.72 per hour. Starbucks says it is supportive of the government’s longer-term ambition to raise base pay to £9.00 per hour.

Shelter’s Tenancy Deposit Loan Scheme is part of the charity’s Home Sweet Loan program in partnership with Generation Rent. Upon its implementation, Starbucks will provide interest-free loans to help its employees – or “partners,” as they’re called at the company — pay rental deposits when they are moving into a new home.

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Robb added, “After successfully launching the programme with our own staff in 2013, it’s great to see that Starbucks is following suit and helping their staff to move into a home without worrying about how they’ll cover the cost. This will no doubt encourage other UK employers to follow their example and give renters the helping hand they need.”

Starbucks’ efforts to take care of its employees extend to the States, where in 2013 CEO Howard Shultzpledged that the company would not cut hours or benefits for partners in response to Obamacare when many other large companies in the food service sector said they would need to shift applicable costs onto their workers; and last year, the coffee giant launched the Starbucks College Achievement Plan — an opportunity for eligible part-time and full-time employees to complete a Bachelor’s degree with full tuition reimbursement through a collaboration with Arizona State University's online degree program.

Luckily, Starbucks isn’t alone in proactively setting a new bar for compensation for workers in the retail and food sectors: In 2014, IKEA announced would raise its average minimum wage in its US stores to $10.76 — a 17 percent increase over the current wage, and $3.51 above the current federal minimum wage — and earlier this year, IKEA UK followed suit by becoming the first UK retailer to pay workers above the new National Living Wage. And in July, Chipotle Mexican Grillexpanded benefits formerly reserved for salaried employees to all workers, including full tuition reimbursements, sick pay, and paid vacations.